The first major residential development for downtown's near West Side is in the works.

The Peanut Factory Lofts — located on the site of a defunct peanut processing plant — is a 98-unit residential project that's expected to dedicate more than half of its rooms to student housing. The roughly $10 million project at 1025 S. Frio St. is about half a mile from the University of Texas at San Antonio's downtown campus.

The apartments, which will range from about 600 to 1,900 square feet, will see rents at about $1.35 per square foot, said Mark Tolley, director of residential services at 210 Developers, the development firm. That's about 8 cents lower than the average rental rate downtown, according to fourth-quarter data from Austin Investor Interests, an apartment tracking firm.

Apartments will be situated inside the main five-story building as well as four silos and two other buildings on the property. The developer also plans to construct another building adjacent to the property that will be used for more residential space.

Amenities there will include two landscaped courtyards and swimming pool.

Construction is expected to start in April and it's scheduled for completion in fall 2014.

The project was granted about $1.4 million in city incentives, Tolley said. The package included the sale of city-owned land adjacent from the property to be used for surface parking. To help with public improvements, the city also approved a $400,000 loan; up to $40,000 of the debt would be forgiven annually as long as 30 percent to 50 percent of the housing units are for students.

District 5 Councilman David Medina, whose district the project is in, noted some nearby developments such as Steel House Lofts, Blue Star Phase II and others south of downtown. He called the projects bold.

He added, however, that he'd like to see more development, like the Peanut Factory Lofts, to the west because of its impact on the community.

“This step is in the right direction and we need to keep heading in that direction,” he said.